Bill Text: HI SB582 | 2024 | Regular Session | Amended
Bill Title: Relating To State Budget.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2024-05-03 - Act 010, 05/03/2024 (Gov. Msg. No. 1110). [SB582 Detail]
Download: Hawaii-2024-SB582-Amended.html
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THE SENATE |
S.B. NO. |
582 |
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THIRTY-SECOND LEGISLATURE, 2023 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 1 |
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A BILL FOR AN ACT
RELATING TO STATE BUDGET.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. This Act is recommended by the governor for immediate passage in accordance with section 9 of article VII of the constitution of the State of Hawaii.
PART I
SECTION 2. The legislature finds that the devastating wildfires brought on by winds from Hurricane Dora on August 8, 2023, resulted in one of the worst natural disasters in the State's history. The wildfires caused loss of life and displacement of thousands on the island of Maui. The disaster also destroyed nearly all of Lahaina.
The legislature further finds that the constitutional responsibility and power to appropriate rests solely with the legislature. Chapter 127A, Hawaii Revised Statutes, was enacted to provide the administration with sufficient ability, during disasters or emergencies of unprecedented size and destructiveness, to ensure the safety of the public and recovery of the State.
The legislature further finds that transparency, communication, coordination, and collaboration between all branches of government is necessary to develop and implement solutions for survivors. In total, more than $1,000,000,000, or ten per cent, of the general fund budget may be necessary to respond to this disaster.
The legislature further finds that to support response and recovery efforts and address immediate 2023 wildfire funding needs, the governor, through the seventh emergency proclamation relating to wildfires, dated September 8, 2023, and executive memorandum no. 23-08, redirected $172,800,000 from selected general fund operating appropriations from Act 164, Session Laws of Hawaii 2023, originally intended for specific purposes and capital improvement projects, to the department of budget and finance. The department of budget and finance subsequently transferred the $172,800,000 to the major disaster fund and other purposes, along with another $30,000,000 that the governor authorized pursuant to section 5 of Act 164, Session Laws of Hawaii 2023. With the existing $5,000,000 major disaster fund appropriation, a total of $199,100,000 has been allocated to the major disaster fund for initial wildfire response and recovery, including the expected State's share of noncongregate housing and debris clean-up costs initially being paid by the Federal Emergency Management Agency. These steps provided what was thought to be sufficient funding for the State to address the expected fiscal year 2023‑2024 response and recovery expenses as of the beginning of January 2024.
The legislature additionally finds that the federal government has allocated $2,000,000,000 to address recovery efforts in Hawaii. This allocation requires Federal Emergency Management Agency approval before it can be spent. As of April 1, 2024, the Federal Emergency Management Agency has approved the expenditure of $205,470,522 on noncongregate housing.
The legislature further finds that the Federal Emergency Management Agency executed the contract for debris clean‑up costs, and the State executed the contracts for noncongregate housing and related expenses for room and board of wildfire victims displaced from their homes. The State's expenses for noncongregate housing and other expenses, including expenses for individuals impacted by the wildfires who have been classified as not eligible for Federal Emergency Management Agency assistance, are expected to exceed the amounts previously transferred to the major disaster fund. Because the State executed these contracts, the State is responsible for making payment and will seek reimbursement from the Federal Emergency Management Agency for eligible costs. Issues have recently arisen over what costs are deemed eligible, and the timeline under which the State will be reimbursed for eligible costs is not clear. The State will require additional funds to cover these immediate expenses in the current fiscal year 2023-2024.
The legislature further finds that the immediate expenses in fiscal year 2023-2024 that the State may be obligated to provide totals $1,018,967,788, including:
(1) $500,000,000 for noncongregate Federal Emergency Management Agency eligible and Federal Emergency Management Agency ineligible housing;
(2) $135,512,492 for the State's share of mission assignment and federal assistance expenses;
(3) $123,680,797 for Federal Emergency Management Agency ineligible transitional housing and rental assistance;
(4) $194,774,499 for potential Federal Emergency Management Agency ineligible state expenses made by various state agencies; and
(5) $65,000,000 for a victim relief fund.
The legislature further finds that uncertainty with the status of Federal Emergency Management Agency eligible and ineligible expenses remain, making accurate appropriation an extreme challenge.
The purpose of this part is to make an emergency appropriation to cover the State's immediate expenses incurred in the Hawaii wildfires disaster response efforts, ensuring that critical state programs retain their funding, appropriated by the legislature, necessary for their continued operation.
SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $292,400,000 or so much thereof as may be necessary for fiscal year 2023-2024 to the department of budget and finance, departmental administration and budget division (BUF101), for expenses related to Federal Emergency Management Agency ineligible noncongregate housing and other costs relating to the provision of food, housing, or other assistance for individuals affected by the Hawaii wildfires disaster that began on August 8, 2023; provided that $72,500,000 or so much thereof as may be necessary may be transferred to the department of human services for Federal Emergency Management Agency ineligible housing and other costs relating to the provision of food, housing, or other assistance for individuals affected by the Hawaii wildfires disaster that began on August 8, 2023; provided that any unexpended or unencumbered balance shall lapse to the general fund on June 30, 2024.
The sum appropriated shall be expended by the department of budget and finance for the purposes of this part.
SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $28,000,000 or so much thereof as may be necessary for fiscal year 2023-2024 to the department of budget and finance, departmental administration and budget division (BUF101), for services, goods, or construction that are eligible for partial federal reimbursement to a state, local, territorial, or tribal (SLTT) government via the Federal Emergency Management Agency public assistance program or individual assistance program for individuals affected by the Hawaii wildfires disaster that began on August 8, 2023. For the purposes of this section, "eligible" means that the services, goods, or construction for which funds are used are delineated as eligible for reimbursement to SLTT governments in the public assistance program and policy guide or successor document, or the individual assistance program and policy guide or successor document; provided that any unexpended or unencumbered balance shall lapse to the general fund on June 30, 2024.
The sum appropriated shall be expended by the department of budget and finance for the purposes of this Act.
SECTION 5. Any law to the contrary notwithstanding, the department of budget and finance and department of human services shall submit the following information associated with the Hawaii wildfires disaster that began on August 8, 2023, to the legislature on the seventh day of each month:
(1) The date of expenditures;
(2) The amount of expenditures made, separately for Federal Emergency Management Agency eligible and Federal Emergency Management Agency ineligible expenses;
(3) The purpose of expenditures;
(4) Any contracts executed for the expenditure of funds;
(5) The liquidation date for all contracts or liabilities; and
(6) A detailed explanation of the public purposes served by the expenditure of resources; provided that the governor shall submit to the legislature a summary report containing the aforementioned information for the previous twelve month period from December 1 to November 30 no later than thirty days prior to the convening of the regular session of 2025.
PART II
SECTION 6. The legislature finds that the State's contribution of public funds to the one ohana bank trust account is for the compromise and settlement of claims to compensate individuals or their personal representatives affected by serious physical injury or death caused by the Maui wildfires and serves a public purpose.
The purpose of this part is to make an emergency appropriation to fund the State's contribution to the one ohana bank trust account for the compromise and settlement of claims caused by the Maui wildfires.
SECTION 7. The legislature finds and declares that the contribution of state moneys to the one ohana bank trust account under this Act for the compromise and settlement of claims is in the public interest and for the public health, safety, and general welfare of the State for the following reasons:
(1) The State recognizes the devastating impact of the Maui wildfires on its residents, resulting in physical injury and loss of life;
(2) It is imperative for the State to respond with compassion and support for those affected by the Maui wildfires, ensuring that victims or their personal representatives are provided with fair and just compensation on a timely basis;
(3) The State's contribution to the one ohana bank trust account is for the compromise and settlement of claims for those who have lost loved ones or suffered serious physical injuries in the Maui wildfires; provided that participation in seeking compensation from the one ohana bank trust account is purely voluntary;
(4) The legislature recognizes that contributors to the one ohana bank trust account besides the State include, among others, the county of Maui, Hawaiian Electric Company, the Kamehameha Schools, Charter Communications/Spectrum, Hawaiian Telcom, and the West Maui Land Company;
(5) The legislature recognizes the one ohana bank trust account as an efficient mechanism to address this urgent and exceptional situation and understands the one ohana bank trust account's unique ability to provide assistance to those in need;
(6) The legislature recognizes the complexity and challenges of tort litigation and finds it prudent to provide an alternative through the one ohana bank trust account of streamlining the compensation process for those impacted by the Maui wildfires;
(7) The legislature finds that it is in the public interest to encourage swift and fair resolution to claims arising from the Maui wildfires, thus alleviating the burden on the judicial system and fostering community support, unity, and recovery in the aftermath of the Maui wildfires; and
(8) The legislature recognizes that individuals seeking compensation from the one ohana bank trust account will be required to release the contributing parties to the fund from further liability and are willingly waiving their rights to pursue damages through tort litigation for wrongful death or personal injury claims, contributing to a more efficient resolution process.
Consequently, the legislature finds and declares that the public purpose is served by authorizing the expenditure of public moneys as the State's contribution to the one ohana bank trust account for the compromise and settlement of claims to provide an alternative for compensation to any individual who was physically injured, or personal representative of a deceased individual who suffered serious physical injury or died, as a result of the Maui wildfires, thus offering a timely and compassionate resolution to those affected by the Maui wildfires while relieving the burden on the judicial system and contributing to the rebuilding of lives and community.
SECTION 8. Any individual who receives compensation from the one ohana bank trust account under this Act shall waive the right to sue for damages related to physical injury or death resulting from the Maui wildfires, recognizing the one ohana bank trust account as an alternative to tort litigation.
SECTION 9. The department of the attorney general shall submit a report to the legislature no later than twenty days prior to the convening of each regular session on:
(1) A listing of claims and the amounts paid by the one ohana bank trust account for the calendar year;
(2) A listing of the administrative costs incurred by the one ohana bank trust account for the calendar year; and
(3) A listing of contributors and their contribution amounts to the one ohana bank trust account received during the calendar year.
SECTION 10. There is appropriated out of the general revenues of the State of Hawaii the sum of $65,000,000 or so much thereof as may be necessary for fiscal year 2023-2024 to fund the State's contribution to the one ohana bank trust account for the compromise and settlement of claims to compensate individuals or personal representatives affected by serious physical injury or death caused by the Maui wildfires; provided that the moneys appropriated in this section shall not lapse at the end of the fiscal year for which the appropriation is made; provided further that any moneys that remain unencumbered on June 30, 2025, shall lapse on that date; provided further that upon closure of the one ohana bank trust account, the remaining balance after the settlement of all administrative costs shall be returned to the contributors to the one ohana bank trust account in proportion to their contributions with the State's proportionate contribution being returned to the general fund.
SECTION 11. The sum appropriated shall be expended by the department of the attorney general for the purposes of this part.
PART III
SECTION 12. Act 247, Session Laws of Hawaii 2022, is amended by amending section 1 to read as follow:
"[SECTION 1. The director of finance is authorized to
issue general obligation bonds in the sum of $300,000,000 or so much thereof as
may be necessary and the same sum or so much thereof as may be necessary is
appropriated for fiscal year 2022-2023 for the other post-employment benefits
trust fund governed by section 87A-42, Hawaii Revised Statutes, to pay or
prepay the State's other post-employment benefits liability; provided that:
(1) The
appropriation made for this transaction as authorized by this section shall not
lapse at the end of the fiscal year for which the appropriation is made;
(2) All
moneys from the appropriation unencumbered as of June 30, 2024, shall lapse as
of that date; and
(3) The
general obligation bonds authorized by this section shall be issued in the sole
discretion of the director of finance; provided that:
(A) To
determine the annual required contribution, a preliminary annual required
contribution to the trust fund shall be developed that treats the outstanding
bond balance as part of the trust fund's unfunded actuarial accrued
liability. The net cash contribution
required to be contributed to the trust fund shall be the greater of:
(i) The
preliminary annual required contribution less the related general obligation
bond payment for the respective year; or
(ii) The
annual required contribution amount calculated under section 87A‑42(f)(2),
Hawaii Revised Statutes, without any special consideration given to the
outstanding balance of the general obligation bonds or any related general
obligation bond payments, for the respective year;
(B) Entities
shall only be permitted to issue general obligation bonds if the all-in true
interest cost of the bonds is at least three hundred basis points less than the
assumed rate of return of the trust fund, to which the proceeds will be
contributed;
(C) General
obligation bonds shall not be issued as a means for addressing budget
shortfalls related to contributions required by law; and
(D) General
obligation bonds shall only be issued as a means to produce long-term savings.]
Repealed."
PART IV
SECTION 14. The legislature finds that under existing law, federal reimbursement moneys, such as funds to be provided by the Federal Emergency Management Agency for the wildfire disaster, are generally deposited into a trust account of the major disaster fund and reimbursed to the originating fund of the expending agency incurring the cost. If the originating funds have lapsed by the time reimbursement is received, then they are reimbursed to the general fund. Only a small amount is allowed to roll over to the next fiscal year and remain available in the major disaster fund.
Due to the size and scope of the wildfire disaster, disaster recovery efforts are expected to continue for several years. However, the State has been informed that Federal Emergency Management Agency reimbursements of amounts outlaid by the State via the major disaster fund are not expected to be paid on a predictable schedule during any given fiscal year, regardless of when the State incurs the expense.
The purpose of this part is to facilitate the continued provision of assistance to wildfire victims and ongoing wildfire recovery efforts by temporarily lifting various restrictions on the use of funds for these purposes and extending the lapse date of certain funds set aside for wildfire response.
SECTION 15. Section 127A-16, Hawaii Revised Statutes, is amended to read as follows:
"§127A-16 Major
disaster fund. (a) The administrator shall submit requests to
the legislature to appropriate from the general revenues of the State
sufficient moneys as may be necessary for expenditure by or under the direction
of the governor for immediate relief in response to an emergency or disaster in
any part of the State; provided that:
(1) The governor has issued a proclamation of a
state of emergency;
(2) The governor shall not expend in excess of
$10,000,000 for immediate relief as a result of any single emergency or
disaster; and
(3) In addition to the funds in paragraph (2), an
additional $5,000,000 may be made available solely for the purpose of matching
federal disaster relief funds when these funds become available to the State
following a presidential disaster declaration.
In expending the moneys, the governor may allot any portion
thereof to any agency, office, or employee of the State or a county for the
most efficient relief for the population.
Notwithstanding this subsection, the only exception to paragraphs (1),
(2), and (3) is that the administrator may use up to $250,000 per year to
support the emergency management reserve corps.
(b) No later than sixty days after any allotment
by the governor or the expenditure of any fund moneys, the administrator shall
report to the legislature on the purpose of the allotment or expenditure.
(c) Except as provided in [subsection
(d),] subsections (d) and (e), federal reimbursement moneys for disaster relief shall
be deemed to be trust moneys and shall be deposited into a trust account with
and under the control of the Hawaii emergency management agency. Upon receipt by the Hawaii emergency
management agency, these moneys shall be reimbursed to the originating fund of
the expending agency; provided that if the original appropriation has lapsed,
the funds shall be returned to the general fund.
(d) Federal reimbursement moneys for disaster
relief for the Hawaii wildfires disaster that began on August 8, 2023, shall be
deemed to be trust moneys and shall be deposited into the Maui wildfire
recovery trust fund, a trust account with and under the control of the Hawaii
emergency management agency. These
moneys and any interest earned thereon shall be used solely for the state share
of services, goods, or construction that are eligible for partial federal
reimbursement to a state, local, territorial, or tribal (SLTT) government via
the Federal Emergency Management Agency public assistance program or individual
assistance program for individuals affected by the Hawaii wildfires disaster
that began on August 8, 2023, and shall not lapse to the general fund.
For
the purposes of this subsection, "eligible" means that the services,
goods, or construction for which funds are used are delineated as eligible for
reimbursement to SLTT governments in the public assistance program and policy
guide or successor document, or the individual assistance program and policy
guide or successor document.
[(d)] (e) In cases in which the department of education
expends the funds appropriated to the department for purposes deemed to be
reimbursable by federal reimbursement moneys for disaster relief, the federal
reimbursement moneys shall not lapse to the general fund and shall be credited
directly to the department of education without regard to whether the original
appropriation has lapsed. Such funds
shall carry over in accordance with section 37-41.5(c).
[(e)]
(f) Any unspent funding under
$2,500,000 shall be rolled over to the next fiscal year to support current and
future emergencies and disasters.
[(f)] (g) Each state department and agency shall submit
to the administrator no later than August 1 of each year a report of all funds
expended, if any, for the prior fiscal year by the state department and agency
for disaster response. The report shall
include:
(1) The source of funds, including the name and account number of the funding source;
(2) The amount and purpose of each expenditure; and
(3) Whether any programs, activities, or contracts were reduced as a result of disaster response spending by the state department and agency.
[(g)] (h) The administrator shall submit an annual
report to the legislature no later than September 1 of each year on:
(1) The amount of federal reimbursement moneys for disaster response that the State could have applied for during the prior fiscal year. The report shall indicate the amount of federal reimbursement moneys for disaster response broken down by department and agency;
(2) The amount of federal reimbursement moneys for disaster response that the State applied for and the amount received during the prior fiscal year. The report shall indicate the amount of federal reimbursement moneys for disaster response broken down by department and agency;
(3) The justification for any difference in the amount of federal reimbursement moneys for disaster response that the State was eligible for and the amount the State applied for;
(4) The average amount of time between the submittal of an application for a Federal Emergency Management Agency reimbursement and receipt of the funds;
(5) The number of disaster accounts opened for the prior fiscal year; and
(6) The information relating to the expenditure of
funds that is reported by each state department and agency pursuant to
subsection [(f).] (g)."
SECTION 16. Any law to the contrary notwithstanding, the department of defense shall submit the following information associated with the Hawaii wildfires disaster that began on August 8, 2023, to the legislature on the seventh day of each month:
(1) Date of federal reimbursements;
(2) Amount of federal reimbursements;
(3) Date of expenditures;
(4) Amount of expenditures made;
(5) Purpose of expenditures;
(6) Any contracts executed for the expenditure of funds; and
(7) Detailed explanation of the public purposes served by the expenditure of resources.
Any law to the contrary notwithstanding, the governor shall submit to the legislature a summary report containing the aforementioned information for the previous twelve month period from December 1 to November 30 no later than thirty days prior to the convening of the regular session of 2025.
SECTION 17. Section 37-41.5, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
"(c) In addition to the five per cent retainage
under subsection (a), the department of education may retain any appropriation
received pursuant to section 127A-16(a) or as reimbursement for disaster relief
pursuant to section [127A-16(d)] 127A-16(e) at the close of the
fiscal year in which the appropriation or reimbursement was received and the
funds retained shall not lapse until June 30 of the first fiscal year of
the next fiscal biennium. Such funds shall
be considered as separate and distinct from the funds the department of
education is authorized to retain pursuant to subsection (a)."
PART V
SECTION 18. In accordance with section 9 of article VII of the Constitution of the State of Hawaii and sections 37-91 and 37-93, Hawaii Revised Statutes, the legislature has determined that the general fund expenditure ceiling for fiscal year 2023-2024 has already been exceeded by $1,052,793,893 or 9.8 per cent. The appropriations contained in this Act will cause the state general fund expenditure ceiling for fiscal year 2023-2024 to be further exceeded by $385,400,000 or 13.0 per cent. This declaration takes into account the additional general fund appropriations authorized for fiscal year 2023-2024 in this Act only. The reasons for exceeding the general fund expenditure ceiling are that:
(1) The appropriations made in this Act are necessary to serve the public interest; and
(2) The appropriations made in this Act meet the needs addressed by this Act.
SECTION 19. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 20. This Act shall take effect on July 1, 3000; provided that on July 1, 2029, sections 15 and 16 of this Act shall be repealed and sections 37-41.5(c) and 127A-16, Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day prior to the effective date of this Act; provided further that on July 1, 2029, any unencumbered trust account moneys retained in the account to be used for the recovery efforts from the Hawaii wildfires disaster that began on August 8, 2023, pursuant to this Act, shall lapse to the general fund on that date.
Report Title:
Maui Wildfires; Major Disaster Fund; Emergency Appropriations; Expenditure Ceiling
Description:
Makes emergency appropriations for certain FEMA-ineligible and FEMA-eligible costs related to the State's response to the August 2023 wildfires and to fund the One Ohana Bank Trust Account to compensate victims of the Maui wildfires. Repeals general obligation bond appropriation for the Other Post-Employment Benefits Trust Fund and Pension Accumulation Fund. Temporarily lifts various restrictions on the use of Major Disaster Relief moneys for Hawaii wildfire response and extends the lapse date of certain funds set aside for this purpose. Requires the department of defense and governor to submit reports on expenditures and federal reimbursements. Effective 7/1/3000. (HD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
